The conversion plan must restrict directors, officers, and certain persons acting with them from buying covered stock without the commissioner’s permission for three years, and from selling stock bought under the plan for one year.
Sec. 826.056. DIRECTORS AND OFFICERS. (a) Except as otherwise provided by this section, the conversion plan must provide that a director or officer of the converting company, or a person acting in concert with a director or officer, may not acquire, without the permission of the commissioner, any capital stock of the resulting company or the stock of another corporation that is participating in the conversion plan before the third anniversary of the effective date of the conversion. This subsection does not prohibit a director or officer from: (1) acquiring capital stock through a broker-dealer; (2) making purchases through the exercise of subscription rights received under the conversion plan; or (3) participating in a stock benefit plan permitted by Section 826.059 or approved by the eligible members under Section 826.107. (b) A conversion plan may provide that the directors and officers of the converting company may receive, without payment, nontransferable subscription rights to purchase capital stock of the resulting company or the stock of another corporation that is participating in the conversion plan. (c) The aggregate number of shares that may be purchased by directors and officers under Subsection (b) may not exceed: (1) 35 percent of the total number of shares to be issued for the resulting company if the total assets of the converting company are less than $50 million; or (2) 25 percent of the total number of shares to be issued for the resulting company if the total assets of the converting company are more than $500 million. (d) For converting companies with total assets between $50 million and $500 million, inclusive, the maximum percentage of the total number of shares that may be purchased shall be interpolated from amounts provided under Subsection (c). (e) A conversion plan must provide that a director or officer of the converting company may not sell stock purchased under the conversion plan before the first anniversary of the effective date of the conversion. (f) Notwithstanding Subsection (e), a conversion plan may provide for the purchase or redemption of stock in the event that a director or officer is no longer associated with the resulting company during the period described by Subsection (e). Added by Acts 2001, 77th Leg., ch. 1419, Sec. 1, eff. June 1, 2003.